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JP Morgan latest bank to make moves into crypto

JP Morgan latest bank to make moves into crypto

JP Morgan made a SEC filing yesterday that stated its intent to give interested investors the opportunity to buy a “basket of companies with exposure to cryptocurrencies”. 

Everything ‘Cryptocurrency’ is certainly occupying a Wall Street that is keen to follow the money and get invested in the world occupied by Bitcoin, Ethereum and other cryptocurrencies, with a perceived huge upside in value. 

Long gone are the days when Jamie Dimon, CEO of JP Morgan Chase, made the statement that he would fire any of his traders immediately if he caught them trading Bitcoin. Since then, he has admitted that he regrets his “Bitcoin is a fraud” comment, and now his bank is looking to invest in the fortunes of the rapidly growing crypto sector. 

The proposed companies to be included in the crypto basket comprise of the likes of MicroStrategy with over 90,000 bitcoins on its balance sheet, Square, which holds 8000 bitcoins, and other companies such as Nvidia, which produces chips for bitcoin mining. 

Although JP Morgan isn’t actually buying Bitcoin itself, nor is it giving direct exposure to cryptocurrencies, it will provide debt products that are linked to the performance of the crypto orientated companies in the basket. 

The weighting of companies in the basket is the following: 

MicroStrategy – 20% 

Square – 18% 

Riot Blockchain – 15% 

Nvidia – 15% 

PayPal Holdings – 10% 

A number of other companies with 5% exposure and less are also in the basket. These include: AMD, Intercontinental Exchange, CME Group and others. 

It is envisaged that if the companies in the basket were to gain 20%, then investors would receive 18.5% after paying a 1.5% fee. 

Other banks to lately announce a move into cryptocurrency include Goldman Sachs, which recently reopened its crypto trading desk, Blackrock, which announced that two of its funds would be investing in Bitcoin futures, and finally BNY Mellon, the oldest US bank, which will transact cryptocurrencies on behalf of its customers. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.  

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